August 04, 2013

Mortgage rates improved about 1/4% since last month's report. Today's best execution rates average 4.375% for a conventional loan and 4.125% for a VA loan. Keep in mind that a "best execution rate" assumes the highest credit rating, a debt-to-income ratio undee the guidelines limit, and at least 20% downpayment. Each borrower is an individual and may or may nor meet that criteria.

But it's a guide if you're watching the mortgage rates market. Speaking of which, you can receive a twice weekly update, via text message, by sending the word "RATE" to 313131. I'll be sending a text message in the middle of the week and on the weekend with the best execution mortgage rates. You can always unsubscribe too so I won't be text-spamming you.

July was crazy for the mortgage bond market. Wild price swings were the norm, with rates getting as low as 4.275% for conventional loans and as high as 4.75%. While that might not seem like a "wild swing" to you, the home buyer, it has been perpelexing to mortgage industry veterans because we can't get a read on the market at all.

One school of thought is that the Federal Reserve Bank will stop subsdizing rates, through bond purchases, as early as September. That would suggest rates could rise as high as 5.0% plus. The other school of thought, that the Fed woul delay this "cold turkey" approach until next year, was confirmed by the less than robust jobs report.

I gave up trying to outguess the Fed when they started this who quantitative easing policy. I'm locking all loans at application and recommend that customers do the same. It's just too volatile and the risk of a being stuck with 5% mortgage is greater than the potential reward of waiting for a 4% rate.